Liquidity for Your Hotel (Updated Nov 24)

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The federal and provincial governments are providing financial support help businesses manage at this time. The AHLA encourages you to talk to your lender(s) about how COVID-19 is impacting your business, and keep them informed about your financial situation.

We will update this list as more information comes available. This information is intended for informational purposes only. Businesses should consult their accountant, financial advisor, or government authorities before applying or making decisions about how they should use this information.

David Lund, the Hotel Financial Coach, has some tips about how hotels can manage during a financial crisis.

Federal Resources

Tourism Relief Fund

• Supports tourism businesses and organizations to adapt their operations to meet public health requirements.
• The fund will be rolled out over two years (until March 31, 2023).
• Non-repayable project contributions up to $100,000 for up to 50% of eligible costs; OR fully repayable project contributions up to $500,000 for up to 75% of eligible costs.
• Timelines:
  • The project start date cannot be earlier than April 19, 2021. For projects already underway, insert the day from which your organization began incurring eligible costs for activities associated with this project.
  • The project end date cannot be later than March 31, 2023.
  • Costs may be eligible on a retroactive basis up to 12 months prior to the receipt of a project application, but no earlier than April 19, 2021.
• Applicants must fall under one of the following categories to be eligible for funding:
  • A key supplier/operator in the visitor experience,
  • Part of a defined tourism cluster or tourism-dependent community, or
  • An anchor product or service in a destination.

• Eligible projects will fall under one of two themes:

1. 1. Product development, or development and enhancement of tourism experiences to help tourism businesses adapt to the “new normal,” to modernize tourism offerings, and to help the sector adopt more environmentally sustainable practices.
   2. Destination development projects that would position communities to take advantage of post-pandemic opportunities through strategic planning for medium- to long-term investments, as well as supporting destination development, in-line with objectives set out in the Federal Tourism Growth Strategy.

• Hotels may qualify if they are:
  • recognized as an anchor attraction in a local destination,
  • are a key supplier or operator in the visitor experience in a region, or
  • are part of a defined tourism cluster.
• Potential projects for hotels that meet the criteria outlined above may vary based on regional needs. Some examples include:
  • Seasonal dispersion: investments in the development of tourism products to extend the hotel’s offerings into a new season (e.g. summer hotel creates winter programming to expand its open season).
  • New/expanded product offering: bringing in a new program (e.g. a culinary program) and/or adapting current programming to the local/regional market. This could increase the price point and/or length of stay.
  • Digital adoption: creating and/or enhancing online booking tools for a hotel.
  • Health and safety: funding for PPE.

Highly Affected Sectors Credit Availability Program (HASCAP)

• Thanks to the lobbying efforts of the Hotel Association of Canada (HAC), the federal government has officially launched the Highly Affected Sectors Credit Availability Program (HASCAP). This is a new COVID-19 relief program to help the hardest-hit businesses with additional financing. Through this program, the Business Development Bank of Canada (BDC) will work with participating Canadian financial institutions to offer government-guaranteed, low-interest loans of up to $1 million.
• Terms of the Program:
  • Eligible businesses can start applying as early as February 1 at principal financial institutions and more widely by February 15.
  • As a first step, you must contact your primary financial institution to get more information and to apply.
    • You can only apply to one financial institution – your primary lender.
    • If your primary lender is not participating in the program, only then may you apply via another financial institution.
  • The program will be available until June 30, 2021

• An applicant business must:
  • Be a commercial enterprise whose intent is to generate revenue from the sale of goods or services that is at least sufficient to cover its operating expenses and service its debt.
  • Have been financially stable and viable prior to the current economic environment.
  • Not have an impaired loan as at March 1, 2020, or the eligible loan closing date.
  • Other eligibility requirements may apply

• You must also fall into one of the following categories:
  • If your hotel has received the Canada Emergency Wage Subsidy (CEWS) or the Canada Emergency Rent Subsidy (CERS):
    • You must provide Canada Revenue Agency attestation forms demonstrating a minimum 50% revenue decline, for at least 3 months, within the 8-month period prior to the date of your HASCAP application.
  • If your hotel did not receive CEWS or CERS and is eligible for it:
    • You must apply for CEWS or CERS.
  • If your hotel does not qualify for CEWS or CERS:
    • You must provide financial statements that reflect at least three months (which do not need to be consecutive) of monthly year-over-year revenue decrease of a minimum of 50% per month, within the 8-month period prior to the date of your HASCAP application.
  • Your financial institution will require the above information to process your request.

• Questions about HASCAP? The Hotel Association of Canada (HAC) hosted a Q&A webinar with experts from the Business Development Bank of Canada (BDC). Watch the video here.
• See FAQs about HASCAP from HAC.

Canada Emergency Rent Subsidy (CERS)

• Mortgage interest support to property owners until June 2021.
• CERS is not just for rent- it includes support for additional fixed costs including insurance, property tax, school tax and other municipal taxes.
• Update March 3, 2021: Government Extends Current Rate Structure for CERS until June 5, 2021

Small & Medium-Sized Enterprise (SME) Loan & Guarantee Program

• Additional support and access to credit through your financial institution

Business Credit Availability Program (BCAP)

Provides more than $10 billion of additional support to businesses experiencing cash flow challenges through Export Development Canada (EDC) and the Business Development Bank of Canada (BDC).

Provincial Resources

Alberta Jobs Now Program

• Up to $370 million to help businesses and non-profit organizations support jobs for unemployed and underemployed Albertans.
• Covers 25% of an employee’s salary for a 52-week period, up to a maximum of $25,000 per employee.
• Can be used to cover salary or training costs.
• Employers who hire persons with disabilities will receive a larger grant.

Canada-Alberta Job Grant (CAJG)

• Provides up to $15,000 per trainee to help them develop skills to find and keep a job.
• Eligibility has been expanded until February 28, 2022 to include employed family members and business owners with fewer than 5 employees.

Deferral of Workers’ Compensation Board (WCB) Premium Payments

• WBC has deferred 2020 WCB premium payments for all private sector employers until 2021
• When invoicing resumes in 2021, small- and medium-sized employers (those with $10 million or less in insurable earnings) will only be required to pay 50% of their 2020 premiums. The other 50% will be paid by the Government of Alberta.
• By deferring premium payments, all private sector employers will benefit from having increased financial liquidity; roughly $350 million in premiums will be waived to support 183,000 small- and medium-sized employers during these difficult economic times

Utility Payment Deferral

• The AHLA is working with government and the Utilities Consumer Advocate to help hotels manage utility costs.

Additional Resources

Alberta Tax Relief Updates

• Altus Group is monitoring Alberta tax relief programs, including municipal property taxes, and posts information on their website as it is released.

Hotel Association of Canada Resources

• Hotel Operating Procedures: Self-Isolation
• Temporary Guidelines for Modified Operations
• FAQ: Taking Care of Employees and Guests
• Guidance for Employers to Plan & Respond to Coronavirus
• Hoteliers Guide: Government of Canada Economic Relief Options

Additional Liquidity & Credit Resources

Resources for Canadian Businesses (Government of Canada)

Hospitality Financial Leadership- What to Do in a Financial Crisis (David Lund, The Hotel Financial Coach)

FAQs for Reporting Financial Metrics (Smith Travel Research, PDF download)

Property Closures

In the unfortunate event that you decide to close your property, the AHLA has prepared a Sample Property Closure Checklist (Word doc file download) to assist you.

Please contact us at WeHelpHotels@ahla.ca or 780.436.6112 (toll-free 1.888.436.6112) if you have other questions or need additional support.